Apple in China: Failing to make good on its commitment?

Apple’s key Chinese supplier is Foxconn, made famous by the rash of suicides committed by its employees, who live packed into dorms, far from home, working brutal schedules of overtime (sometimes as much as 80 hours a month, on top of the core 160 hours), subjected to verbal abuse and humiliating punishment by supervisors, and systematically cheated on wages.

When labor rights groups in China and Hong Kong exposed these conditions and the New York Times  published a front-page exposé, Apple hired the Fair Labor Association (FLA) to help it improve conditions—and its corporate image. In a public report, Apple committed itself to a broad range of reforms, and has made some headway on several fronts, according to the FLA.

But many observers are skeptical because Apple and Foxconn have put off most of the reforms that would actually cost them some money. The FLA could not, for example, get the companies to agree to comply with Chinese law limiting maximum overtime hours until the summer of 2013, and the companies continue to subject Foxconn workers to 60 hours of overtime per month—nearly twice the amount of overtime permitted by law. The companies also pledged only to study whether the workers were right in their complaints that wages are too low to meet basic needs. And most telling, there is no indication the companies have kept their public promise to pay back wages to the hundreds of thousands of employees Foxconn systematically cheated by working them “off the clock.”

In its public communications at the time of the completion of its initial audits in March of this year, the FLA reported that Foxconn and Apple had committed to provide full retroactive pay to workers who were not paid for time worked as a result of the violations of overtime compensation law that the FLA identified (violations which have long been reported by independent investigators). The FLA further stated at that time that Apple and Foxconn were “conducting an audit” to determine what is owed.

However, there is no reference to this issue in the FLA’s recent progress report. Many of the workers are undoubtedly owed hundreds of dollars by Foxconn, plus interest. Given that Foxconn’s legal obligations concerning overtime pay are unambiguous and undisputed, and given the technological prowess of both Foxconn and Apple, the amounts owed should have been calculated within a matter of weeks. If Foxconn failed to keep accurate records in some instances, then honest estimates could, at least, have been made in a similar timeframe. Thus, those workers currently in Foxconn’s employ who are owed money should have been compensated in April or May, and Foxconn should by then have at least begun the process of locating and paying former employees.

The amounts involved are not trivial. The FLA found that Foxconn systematically failed to pay employees for non-production duty time at the start of the day and as much as 30 minutes of work at the end of their shifts. Spread over six years and, given high rates of turnover, potentially involving more than a million workers, the back wages owed could exceed $75 million.

Apple’s and the FLA’s silence about what they are doing to remedy these violations is an alarming warning signal that the entire response to the scandals at Foxconn is about public relations rather than respect for the workers and a commitment to treat them fairly and decently.